Suppose a project is subject to the following risk events (each with a given probability of occurring and a cost associated with that occurrence): $$\begin{array} { l l l }
\text { Event } & \text { Probability } & \text { Cost } ( \$ 000 \mathrm {~s} ) \
\text { I } & .2 & 53 \
\text { II } & .6 & 54 \
\text { III } & .1 & 12 \
\text { IV } & .3 & 21
\end{array}$$ Given these, Event _____ should probably get the most attention and Event _____ should probably get the least.
A) II; IV
B) III; IV
C) I; III
D) I; II
E) II; III

Question

Suppose a project is subject to the following risk events (each with a given probability of occurring and a cost associated with that occurrence): $$\begin{array} { l l l } 
\text { Event } & \text { Probability } & \text { Cost } ( \$ 000 \mathrm {~s} ) \
\text { I } & .2 & 53 \
\text { II } & .6 & 54 \
\text { III } & .1 & 12 \
\text { IV } & .3 & 21
\end{array}$$ Given these, Event _____ should probably get the most attention and Event _____ should probably get the least.
A) II; IV
B) III; IV
C) I; III
D) I; II
E) II; III

Quizplus · Accepted Answer

Event II has the highest expected cost (probability * cost), making it the most critical, while Event III has the lowest expected cost, making it the least critical.

Suppose a Project Is Subject to the Following Risk Events